When to get travel insurance

When to get travel insurance

It may help some vacationers avoid financial disaster, but the protection isn’t necessarily good value for everyone

Chicago-area resident Lori Park and her 80-year-old mother, Nancy Park, were on a cruise to Hawaii when her mother fell ill. She spent five days in the ship’s hospital before being evacuated to Mexico and then flown back to the United States.

Two senior adults with snorkeling gear in the ocean.  Next Avenue, it's worth getting travel insurance
When buying travel insurance, read the fine print and take notes so you can compare what’s on offer, what’s not, and what it will cost | Recognition: Getty

All of that medical care and transportation added up to thousands of dollars in unexpected expenses, but it was all covered by a $436 travel insurance policy the two women bought before they set sail.

Lori Park says she never takes a vacation without insurance. “It’s something I think is essential when traveling,” she notes.

“It’s something I consider essential when traveling.”

Do you need travel insurance?

There are five major types of travel insurance: airline policies, which pay out if your plane crashes; baggage insurance to cover damaged, lost or stolen baggage; trip interruption/cancellation insurance to compensate you for trips that do not take place; health insurance for doctor visits and hospital stays; and evacuation coverage, which will transfer you to an appropriate medical facility. You can buy them individually or in bundles.

Travel experts say insurance can help people avoid potentially catastrophic expenses, as was the case for the parks. But it is not necessary for everyone.

“Insurance adds about 13 percent to the cost of a trip,” says Jay Smith, president of Hatfield, Massachusetts-based Sports Travel and Tours, which specializes in sports travel. “If someone is traveling locally or if the airfare is refundable or usable in the future and the hotel has a cancellation prior to travel — even if it’s 48 hours in advance — then there’s no real need for insurance.”

You don’t need insurance that covers accommodation and airfare if you plan to stay with friends and purchase your ticket with redeemable frequent flyer points. You would only be insured for events that would expose you to major financial loss (e.g. if you develop a serious illness requiring hospitalization or miss a cruise due to flight delays).

How to buy travel insurance

To find a suitable policy, you should consider what type of coverage you need and how much risk you can afford, and then look for a low premium.

Insurance companies determine the cost of a policy by considering your destination, mode of transportation (scheduled flight or charter? rental car or taxi?), lodging (cruise ship? resort? AirBnB?), activities (swimming with sharks? skydiving?), and local weather (hurricane season in the Caribbean?).

Then they look at age and previous illnesses. Insurance will be more expensive for someone in their 80s than in their 70s. People in their 70s taking an extended cruise abroad, even fully vaccinated, have seen offers of $10,000. It is therefore important to buy and compare policies, benefits and costs.

What security do you want or need? With COVID still active, you may want to cover yourself and your group against the disease. Choose a policy that offers primary health insurance rather than secondary coverage; The latter requires you to first file claims with your regular health insurance and later sue the travel insurance company for the balance owed.

The cost of travel insurance depends on how much medical and evacuation coverage you buy. Higher dollar limits are better but more expensive. You may want to consider cancellation for any reason coverage which, as the name suggests, reimburses the cost of a trip you cancel for any reason – even if you just change your mind.

“It’s always a good idea to cover your prepaid, non-refundable travel expenses, especially during hurricane season,” said Dan Drenn, director of sales and marketing for the Omaha, Nebraska Travel Insurance Center. “If you have valid trip cancellation insurance that was purchased before a storm was announced, you can rest easy knowing that a hurricane that ruins your trip won’t blow your bank account.”

It doesn’t take a hurricane to illustrate why travel insurance is worth considering. Janet Jones Caraker of Island Jack’s Travel in Dexter, Missouri, says she knows a traveler who took her entire family, husband, adult children and grandchildren on a trip to Ireland. They decided not to take out insurance, and while they were there, the woman’s husband died.

“There is no grief that has to be this good [pay] $100,000 to have her husband’s remains cared for and transported home,” says Caraker. “There are people who can afford it, but most can’t.”

“If you have valid trip cancellation insurance, you can rest assured that a hurricane that ruins your trip won’t destroy your bank account.”

It’s not just about how much you could lose if you can’t or don’t make that trip; How much does a replacement holiday cost you? How much more expensive will transport, accommodation and activities be in the next year or two? And when do you have the opportunity to take that vacation, especially a bucket list trip where vacation days need to be coordinated for members of multiple families?

How to save money on travel insurance

Just as coverage can vary from one insurer to another, so can the price. To save money on insurance, first check your credit card to see if it offers coverage. If you decide to buy insurance, buy as little as you need – if your luggage is worth $2,500, don’t insure it for $15,000. If you pay for a cruise, resort, or flight with replaceable points, you don’t need to insure them at all.

Most of the time, Medicare doesn’t provide coverage outside of the United States. If you have a private Medicare Advantage or Medicare Supplemental policy, check to see if it offers such coverage. If not, you need travel insurance that covers medical expenses abroad. If you travel frequently, consider an annual policy that covers all of your trips.

If you pay for your holiday in installments before you travel, does the insurer allow you to pay for the insurance in comparable installments? You don’t want to pay the full cost of insurance if you’ve only paid a 10% deposit.

Determine what a pre-existing condition is. For example, if you have diabetes, this is generally only considered “pre-existing” if your medication is changed within about two weeks of your departure.

The bottom line is that when buying travel insurance, you need to read the fine print and take plenty of notes so you can compare what’s on offer, what’s not, and what it costs.

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